Guerdon Ltd Is Reviewing a Project That Has an Initial

question 40

Multiple Choice

Guerdon Ltd is reviewing a project that has an initial outlay of $3m. The project will generate a cash inflow of $2m per annum. The project is expected to have a useful life of six years and a zero salvage value. This company uses straight-line depreciation. What is the payback period?

• A) 0.67 years
• B) 1.5 years
• C) 2.0 years
• D) 6 years

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Definitions:

Toilet

A fixture used for the collection or disposal of human urine and feces.

Water Demand

The total quantity of water needed for various purposes, such as drinking, sanitation, agriculture, and industrial processes.

Positive Feedback

A process in which an initial change leads to further changes that reinforce the initial one, often leading to amplification of the effect.